Breaking

Vale’s Giant Iron-Ore Ship Reaches China Port for First Time

Dec. 28 (Bloomberg) -- One of the world’s largest commodity
ships operated for Vale SA reached a Chinese port for the first
time, after the nation’s refusal to allow such vessels delayed
by more than six months the Brazilian miner’s plan to control
shipments with giant carriers.

The Berge Everest, one of the four vessels BW Group will
use to haul iron ore for Vale, has reached the Dalian port fully
loaded from Brazil, T.S. Ang, a technical executive at BW Fleet
Management in Singapore, the vessel’s owner, said by phone
today. He didn’t elaborate as the company is awaiting further
details.

Vale is spending at least $8.1 billion on the valemax
vessels, including buying 19 very large ore carriers and leasing
another 16 in long-term contracts, as it seeks lower freight
costs from Brazil to China, its biggest market. The plan has
spurred opposition from Chinese shipowners who say it will
worsen overcapacity and cause industrywide losses.

BW Group will operate four vessels for Vale, the miner said
in 2007. The ship, with a draft of 21.3 meters, is moored
outside Dalian, according to data on Bloomberg. The vessel,
built by Bohai Shipbuilding Heavy Industry Co., left Brazil in
early November, the data showed.

Carolyn Tang, a spokeswoman at Vale China, didn’t answer
calls to her office today. A man who said his surname is Wang
and is the office secretary of the Dalian port, said he wasn’t
aware of the ship.

Largest Consumer

The Brazilian mining company, the world’s biggest iron ore
miner, ships about 45 percent of sales to China, the largest
consumer of the steelmaking ingredient.

Vale’s former Chief Executive Officer Roger Agnelli oversaw
agreements for the 400,000 deadweight-ton vessels to reduce a
reliance on outside shipping lines and risks from changes in
freight costs. The Baltic Dry Index, a benchmark for global
commodity-shipping rates, fluctuated more than 40 percent on an
annual basis every year except one from 2001 to 2010.

The Vale vessels are about twice as big as the capesize
ships that are now generally used to ferry commodities from
Brazil to China. The miner plans to send about 130 million tons
of iron ore on the route both this year and next.

Vale has held talks with Chinese shipping lines about
selling or leasing the about 360-meter-long vessels, Teddy Tang,
the chief financial officer of its China operations, said in
September. No deals had been reached.

The China Shipowners Association, whose members hold about
80 percent of the nation’s shipping capacity, has advised lines
not to take the vessels, Executive Vice Chairman Zhang Shouguo
has said.